When people play a lottery, they buy a ticket with a chance to win a prize. Most prizes consist of cash, but some are goods or services. A number is drawn from a pool of entries and if the number matches a winning ticket, a winner is declared.
Lotteries are common sources of state revenues. In 2002, they reaped $42 billion. Supporters tout them as an easy revenue-raiser and a painless alternative to higher taxes, while opponents criticize them as dishonest and unseemly.
A common argument against lotteries is that they are a form of “regressive taxation.” Regressive taxes put a heavier burden on lower-income taxpayers than higher-income ones, and are a form of unfair taxation. This claim is based on the fact that poor and working-class people are more likely to play lotteries.
Other criticisms of lotteries focus on their lack of reliability and social costs. For example, one study analyzed data from the Consumer Expenditure Survey to examine whether certain characteristics, such as age, gender and race/ethnicity, affect the likelihood of losing money on lottery tickets and pari-mutual betting. The results showed that, on average, less wealthy and black respondents lose a greater percentage of their incomes buying tickets and engaging in pari-mutual betting than wealthier white respondents. This finding is consistent with previous research examining other correlated behaviors, such as alcohol and drug use.